Devcon to sell non-security division
BOCA RATON, Fla.--Devcon International took a giant step June 14 toward becoming a pure-play security company when it announced its intention to sell its construction division to a private investment group, and reinvest the proceeds into its security operations.
The transaction, which Devcon estimated would be valued at $12.2 million, is subject to a final agreement with the purchasing group, which is led by The Symonette Group. "This transaction will substantially complete Devcon's transformation into a security services company, in addition to supplying us with valuable additional cash resources," Devcon president and chief executive officer Stephen Ruzika said in a statement.
Devcon bought its first alarm company in the summer of 2004, and has been building its security business ever since. The company has three operating divisions, the security division, the construction division and the materials division.
"Upon completion of this transaction, only one significant materials operation remains-- Devcon's St. Martin/Sint Maarten materials operation," the statement said.
Based on the agreed purchase, Devcon anticipates recording an additional pre-tax impairment charge of $2.6 million during the second quarter of 2006, related to the disposal of assets. Once this agreement is completed, Devcon will have realized roughly $42.8 million in value to date from its construction and materials operations, according to the statement. "These amounts have been or will be redeployed into security services," the statement said.